Author: Stephen Blank

Stephen R. Blank joined ULI in December 1998 as Senior Fellow, Finance. His primary responsibilities include: expanding ULI’s real estate capital markets information and education programs; authoring real estate capital market commentary; participating as a principal researcher and adviser for the Emerging Trends in Real Estate series of publications; organizing and participating in real estate capital markets programs at ULI events worldwide; and participating in industry meetings, seminars, and conferences.
Prior to joining ULI, Blank served from December 1993 to November 1998 as Managing Director, Real Estate Investment Banking of Oppenheimer & Co., Inc. His responsibilities included: structuring, underwriting, and executing corporate financings including initial public offerings of common and preferred shares, unsecured debentures, and convertible bonds; property acquisitions, dispositions, and financing; and financial advisory services including mergers and acquisitions, corporate restructurings, and recapitalizations.

Articles by Stephen Blank

Monday’s Numbers: December 22, 2014Published on December 22, 2014 in Capital MarketsThe Real Estate Roundtable released the results of its fourth-quarter 2014 Sentiment Survey. Topline findings included the following: increases in interest rates are likely to play out more slowly than expected, equity and debt capital for real estate is widely available, and return expectations have been dialed down by some investors who feel we are nearing the top of the current cycle.

Monday’s Numbers: December 15, 2014Published on December 15, 2014 in Capital MarketsThe Trepp survey for the week ended December 5th, showed spreads relatively unchanged over the past 30 days, with the average spread increasing 2 basis points. The implied all-in cost of for a 10-year mortgage remains in the 3.50 percent to 4.00 percent range; last year at this time we were talking rates of 4.50 percent to 5.00 percent.

Monday’s Numbers: December 8, 2014Published on December 08, 2014 in Capital MarketsThe Trepp survey for the week ending November 28, 2014, showed spreads relatively unchanged over the past 30 days, with the average spread declining 1 basis point. During the period, borrowers benefited from a 12-basis-point decline in the yield on ten-year Treasury notes. The implied all-in cost of 3.6 percent is 104—repeat, 104—basis points lower than it was on December 31, 2013.

Monday’s Numbers: December 1, 2014Published on December 01, 2014 in Capital MarketsThe Trepp survey was not conducted last week due to the Thanksgiving holiday. If the survey had been conducted, it most likely would have shown a decline in average spreads of 10 to 15 basis points, mirroring the recent decline in yields on ten-year Treasury bonds, which closed at 2.18 percent on November 28.

Monday’s Numbers: November 24, 2014Published on November 24, 2014 in Capital MarketsThe Trepp survey for the week ending November 14, 2014, showed spreads basically unchanged as the debt markets entered the listless pre–holiday period; the time period stretching from now through the end of the Thanksgiving weekend should be moribund, with not much happening that qualifies as newsworthy.

Monday’s Numbers: November 17, 2014Published on November 17, 2014 in Capital MarketsThe Trepp survey for the week ending November 7, 2014, showed average spreads basically unchanged as lenders and borrowers alike focus on getting 2014’s remaining deals “papered” by December 31. Absent the appearance of a “black swan,” we expect nothing of note to change over the next six weeks. All-in cost remains in the wildly attractive 3.50 to 4.00 percent range.

Michael D. Fascitelli on Markets, Success, and Giving BackPublished on October 17, 2014 in Capital MarketsOn October 20, the ULI Foundation will honor Foundation Governor Michael D. Fascitelli for his contributions to the Institute and his career accomplishments in real estate finance and responsible land use. Fascitelli discusses the current state of financial markets—and what’s next for his career with ULI senior fellow Stephen Blank.

Monday’s Numbers: September 29, 2014Published on September 29, 2014 in Capital MarketsThat anguished cry you heard from the capital markets during the week was the result of the California Public Employees’ Retirement System (CalPERS) announcing that it would no longer invest in hedge funds, saying they were too time-consuming and too complex, and had produced unsatisfactory rates of return. Could real estate be next?

Monday’s Numbers: September 22, 2014Published on September 22, 2014 in Capital MarketsThe Trepp survey for the week ending September 12 showed average spreads coming in about 5 basis points. The implied rate for ten-year, modestly leveraged commercial real estate mortgages was 4.0 percent, 64 basis points lower than year-end 2013. It remains a great time to be a borrower.

Monday’s Numbers: September 15, 2014Published on September 15, 2014 in Capital MarketsThe Trepp survey for the week ending September 5, 2014, again showed average spreads literally unchanged as the markets got back after the three-day holiday weekend, rested and ready to take on the world’s challenges. If you are planning financing and/or refinancing this year, now is the time to put the pedal to the floor.

Monday’s Numbers: September 8, 2014Published on September 08, 2014 in Capital MarketsThe Real Estate Roundtable released their quarterly Sentiment Index, with the index increasing slightly, reflecting participants’ confidence in a continuing recovery in the U.S. economy as well as increasing allocations of capital to the real estate industry.

Monday’s Numbers: August 25, 2014Published on August 25, 2014 in Capital MarketsThe Trepp survey for the week ending August 15, 2014, showed average spreads coming in an average of 2 basis points. The implied rate for ten-year, modestly leveraged commercial real estate mortgages decreased to 373 basis points on the back of a 10-basis-point decrease in ten-year Treasuries.

Monday’s Numbers: August 11, 2014Published on August 11, 2014 in Capital MarketsThe conventional wisdom is that the Fed will allow interest rates to begin to increase later in the year. If that’s the case, why are ten-year U.S. Treasuries declining, reaching an intraday low of 2.35 percent, a rate not seen since last June?

Monday’s Numbers: July 28, 2014Published on July 28, 2014 in Capital MarketsA recent article described how yield-starved investors are turning their attention and buying power to riskier and riskier investments. And companies are taking full advantage, issuing more than $350 billion of bonds year-to-date, on pace to exceed last year’s record $447 billion of issuance.

Monday’s Numbers: July 14, 2014Published on July 14, 2014 in Capital MarketsThe Real Estate Research Corporation has released its buy/sell/hold recommendations for the first and second quarters of 2014 based on an investor attitude survey, with significant movement at the property-sector level.

Monday’s Numbers: July 7, 2014Published on July 07, 2014 in Capital MarketsThis may come as a surprise, but the largest private equity investor over the past five years is the Canadian Pension Plan Investment Board (CPPIB). According to a study conducted by Private Equity International, CPPIB has allocated 18 percent—or $26.2 billion—of its investable funds to private equity since 2009.

Monday’s Numbers: June 30, 2014Published on June 30, 2014 in Capital MarketsThe Trepp survey for the week ending June 20, 2014, continued the trend of spreads implying ten-year commercial real estate mortgage rates for institutional properties at +/–4 percent.

Monday’s Numbers: June 23, 2014Published on June 23, 2014 in Capital MarketsFor the 14th consecutive trailing 12-month period, the NCREIF National Property Index showed double-digit returns (composed of income and appreciation in value), reflecting a combination of continuing improvement in property fundamentals and high levels of investor demand for income-producing assets.

Monday’s Numbers: June 9, 2014Published on June 09, 2014 in Capital MarketsThe Trepp survey for the week ended May 23 showed spreads widening about 4 basis points; fast forward one week and the survey (dated May 30) show spreads coming in at 4+/- basis points. The implied ten-year commercial real estate mortgage rate for institutional properties remains in a range around 4 percent.

Monday’s Numbers: June 2, 2014Published on June 02, 2014 in Capital MarketsAccording to the Switzerland-based Institute for Management Development (IMD), Singapore has joined the United States and Switzerland as one of the top three most competitive nations, followed by Hong Kong, Sweden, and Germany.

Monday’s Numbers: May 27, 2014Published on May 27, 2014 in Capital MarketsThe new generation of commercial mortgage–backed securities, referred to in industry parlance as “CMBS 2.0,” has seen its first defaults. According to Fitch Ratings, six conduit loans with a total balance of $54.1 million and three loans in agency transactions totaling $20.8 million went more than 60 days past due.

Monday’s Numbers: May 19, 2014Published on May 19, 2014 in Capital MarketsThe Trepp survey for the week ended May 9 showed spreads unchanged and apparently unlikely to change without some type of financial or political event occurring. The implied ten-year commercial real estate mortgage rate remains at 4.00 percent for pristine, institutional properties.

Monday’s Numbers: May 5, 2014Published on May 05, 2014 in Capital MarketsThe Trepp survey for the week ended April 25th showed rates basically unchanged during the past week. While competition is “fierce” but no one seems to “have gone stupid” yet.

Monday’s Numbers: April 28, 2014Published on April 28, 2014 in Capital MarketsThe Trepp survey for the week ending April 18, 2014, showed rates unchanged over the past two weeks. Every indication is that market participants are “going about their business,” i.e., borrowers are borrowing and lenders are lending.

Monday’s Numbers: April 21, 2014Published on April 21, 2014 in Capital MarketsThis past Wednesday, the hottest ticket in New York City was not on Broadway or for the baseball game. Rather, it was for the luncheon meeting of the Economics Club of New York, which had Janet Yellen, chair of the Federal Reserve Board, as its featured speaker

Monday’s Numbers: April 14, 2014Published on April 14, 2014 in Capital Markets The Trepp survey for the period ending April 4, 2014, showed spreads basically unchanged, with the implied ten-year rate for properties with 50 percent to 59 percent loan-to-value ratios at 4.10 percent.

Monday’s Numbers: March 31, 2014Published on March 31, 2014 in Capital MarketsMaturing loans are back. Published reports from sources including conventional and securitized commercial mortgage lenders, commercial bankers, and investment bankers show that the real estate industry will continue to be challenged by the amount of loans maturing from 2014 to 2017.

Monday’s Numbers: March 24, 2014Published on March 24, 2014 in Capital MarketsThe Trepp survey for the period ending March 14, 2014, showed spreads unchanged across all product categories, with the implied ten-year rate for properties with 50 percent to 59 percent loan-to-value ratios remaining in the 4.25 percent range.

Monday’s Numbers: March 17, 2014Published on March 17, 2014 in Capital MarketsHappy St. Patrick’s Day. One reaction to last week’s posting: an experienced commercial banker based on the East Coast echoed our concerns regarding current investment activities and underwriting practices, saying spread compression is happening at an alarming pace and risk is being underpriced.

Monday’s Numbers: March 10, 2014Published on March 10, 2014 in Capital MarketsAccording to the Mortgage Bankers Association, delinquency rates for commercial real estate mortgages continued to decline during the fourth quarter of 2013, reaching record low levels. CMBS rates were at 6.97 percent, as compared with the high of 9.02 percent during the second quarter of 2011.

Monday’s Numbers: March 3, 2014Published on March 03, 2014 in Capital MarketsAre we back where we started? The most recent Real Estate Research Corporation survey shows investment metrics near where they were at the height of the last decade.

Monday’s Numbers: February 24, 2014Published on February 24, 2014 in Capital MarketsAccording to the latest sentiment index survey by the Real Estate Roundtable, industry confidence is up modestly quarter over quarter, with policy headwinds remaining in a gridlocked Washington, D.C.

Monday’s Numbers: February 10, 2014Published on February 10, 2014 in Capital MarketsIt was a very quiet week, with the markets going this way and that. After December 2013’s disappointing jobs results, economists and analysts waited nervously for January 2014’s results.

Monday’s Numbers: February 3, 2014Published on February 03, 2014 in Capital MarketsAccording to Jones Lang LaSalle’s recently published “City Momentum Index,” San Francisco is currently the world’s most dynamic city. Emerging Trends in Real Estate 2014, published last fall, is in agreement.

Monday’s Numbers: January 27, 2014Published on January 27, 2014 in Capital MarketsIs it time to worry about lenders, and a race to the bottom in underwriting deterioration? Moody’s Investors Service and Fitch Ratings think so, as each recently noted weakening in underwriting standards for conduit-originated commercial mortgage–backed securities.

Monday’s Numbers: January 20, 2014Published on January 20, 2014 in Capital MarketsLast week, we reviewed capital flows in the real estate capital markets in 2013; this week, we climb out on a limb and start sawing as we try to forecast what 2014 will look like.

Monday’s Numbers: January 13, 2014Published on January 13, 2014 in Capital MarketsThis week, we review the “how much, how little, how big, how small” of the real estate capital markets for 2013; next week, we will examine the projections, climb out on a limb, and try to forecast what 2014 will look like.

Monday’s Numbers: December 16, 2013Published on December 16, 2013 in Capital MarketsThe 20th Annual ULI/McCoy Symposium on Real Estate Finance was held last week in New York City. The invitation-only event provides an opportunity for industry leaders to discuss issues of common concern to participants in the real estate industry, including the economy, the Federal Reserve, and the debt and equity markets.

Monday’s Numbers: November 25, 2013Published on November 25, 2013 in Capital MarketsWhat kind of a year will 2013 turn out to be? All in all, a pretty good one. Capitalization rates have fluctuated in a narrow band all year, with no sign of a breakout or a breakdown.

Monday’s Numbers: November 18, 2013Published on November 18, 2013 in Capital MarketsWhere are interest rates going next? Up, obviously, but for planning purposes, it is important to hear from experts regarding how much and when the changes are expected. The following matrix includes information from J.P. Morgan, Barclays Capital, Bank of America, and Morgan Stanley.

Monday’s Numbers: November 11, 2013Published on November 12, 2013 in Capital MarketsNotwithstanding recent talk of an inflection point or a pause in transaction activity, sales of commercial property continued to increase quarter over quarter, reaching almost $90 billion for the third quarter of 2013. According to Real Capital Analytics, 2013 sales “will easily” exceed 2012’s $300 billion.

Monday’s Numbers: October 28, 2013Published on October 28, 2013 in Capital MarketsNotwithstanding recent talk of an inflection point or a pause in transaction activity, sales of commercial property continued to increase quarter over quarter, reaching almost $90 billion for the third quarter of 2013. According to Real Capital Analytics, 2013 sales “will easily” exceed 2012’s $300 billion.

Monday’s Numbers: October 21, 2013Published on October 21, 2013 in Capital MarketsReal Estate Research Corporation’s most recent survey of the attitudes of institutional investors shows a marked change in buy, sell, or hold responses compared with a year ago. For example, the buy percentage of investors focused on acquiring office properties in central business districts (CBDs) declined from 38 percent in the third quarter of 2012 to 20 percent in the third quarter of this year.

Monday’s Numbers: October 14, 2013Published on October 14, 2013 in Capital MarketsThe Trepp survey for the period ending October 4, 2013, showed the market treading water, waiting for some direction as to the solution to the issues being argued in Congress and with the president.

Monday’s Numbers: October 7, 2013Published on October 07, 2013 in Capital MarketsIf the debt ceiling is not increased and the United States defaults (technically or actually) on its obligations, the consequences are thought by most experts to be dire, including substantial declines in the stock market, large increases in short- and long-term interest rates, and an economy rapidly entering into a deep and serious recession.

Monday’s Numbers: September 30, 2013Published on September 30, 2013 in Capital MarketsSay it isn’t so: As predicted here in the past, the recent run-up rates is starting to impact deals. In a transaction involving an income-producing property, the highest bidder terminated their contract near the end of the due diligence period last week.

Monday’s Numbers: September 23, 2013Published on September 23, 2013 in Capital MarketsYear-to-date issuance of commercial mortgage–backed securities ($56.7 billion) has exceeded the entire amount ($54.3 billion) issued in 2012 and is well on its way to reaching $80 billion or higher.

Monday’s Numbers: September 9, 2013Published on September 09, 2013 in Capital MarketsU.S. job growth was reported to be 169,000 in August. All in all, the jobs numbers do not add a lot of directional clarity given all the things that are still on our plate, including Syria, U.S. budget talks, and the debt ceiling, among others. Everyone wants to know when QE3 will "start to end" and tapering will begin; your guess is as good as ours.

Monday’s Numbers: August 26, 2013Published on August 26, 2013 in Capital MarketsWith interest rates up over 100 basis points since May 1, it may be time for a stress test aimed at assessing the sensitivity of your portfolio to recent and expected future rate increases. You can be sure your lender is already doing one.

Monday’s Numbers: August 19, 2013Published on August 19, 2013 in Capital MarketsReal Estate Research Corporation recently released its second-quarter 2013 survey of institutional participants in the commercial real estate market. With the exception of suburban office and multifamily, investment conditions improved quarter over quarter, reflecting the view that real estate remains an attractive investment alternative.

Monday’s Numbers: August 12, 2013Published on August 12, 2013 in Capital MarketsAccording to a report issued by Trepp last week, the payoff rate of maturing commercial mortgage–backed securities loans continues to improve. An incredible 74 percent of CMBS loans reaching their balloon maturity last month were repaid in full, up 15 percent month over month.

Monday’s Numbers: August 5, 2013Published on August 05, 2013 in Capital MarketsThe Aon Risk Survey looks at the top current and future risks its clients face. The top risk continues to be an economic slowdown and a slow recovery, while cash flow and liquidity ranked at the low end for both the present and future.

Monday’s Numbers: July 29, 2013Published on July 29, 2013 in Capital MarketsGrowth in new construction in the United States remains muted, as both business generally and real estate specifically wait for growth in the economy. The Architecture Billings Index—a proxy for future construction—declined 1.3 points to 51.6 in June while global sales of cranes have declined 16 percent from 2008’s level, with 65 percent of new sales in China.

Monday’s Numbers: July 22, 2013Published on July 22, 2013 in Capital MarketsWhile many of us were trying to “out-parse” each other as we dissected the public ruminations of the Federal Reserve on the path of QE2, the capital markets seemed to have voted with their feet. As of mid-July, the national average 30-year fixed rate home mortgage was priced at 4.51 percent, its highest level since July 2011.

Monday’s Numbers: July 15, 2013Published on July 15, 2013 in Capital MarketsWall Street seems to be experiencing something between a “summer swoon” and a bad reaction to a visit to the house of mirrors, as it continues to parse, re-parse, and parse once again the all too numerous statements by members of the Federal Reserve’s hierarchy.

Monday’s Numbers: July 1, 2013Published on July 01, 2013 in Capital MarketsRecent volatility in the debt capital markets, caused primarily by the mere suggestion that the Federal Reserve might scale back its bond-buying program later this year, is causing any number of transactions to be put on hold. With rates in flux there seems to be "paralysis of analysis" taking place.

Monday’s Numbers: June 24, 2013Published on June 24, 2013 in Capital MarketsAmong the best bets highlighted in the 2013 edition of Emerging Trends in Real Estate was the advice to lock in then-current rates rather than stay with floating-rate debt. Here we are roughly seven months later and yet another prediction is coming true, as we see that ten-year U.S. Treasury bonds are at a 22-month high and 30-year bonds are at their highest level since September 11.

Monday’s Numbers: June 17, 2013Published on June 17, 2013 in Capital MarketsReaders should not need to be reminded that the global economy is fragile. While the United States may be the “cleanest dirty shirt in the closet,” Europe continues to struggle and China faces the possibility of a slowdown. The United States is still not strong enough to carry the burden of economic growth by itself.

Monday’s Numbers: June 10, 2013Published on June 10, 2013 in Capital MarketsAt ULI’s Real Estate Finance and Investment 2013 conference in San Francisco, much of what participants heard and said reflected themes we have been echoing since the beginning of 2012: “It’s the economy, stupid” and jobs drive the economy; there’s a wall of money aggressively looking for current yield; and the eurozone’s economy is a mess.

Monday’s Numbers: May 20, 2013Published on May 20, 2013 in Capital MarketsULI senior fellow Stephen Blank's highlights from panel discussions at ULI Spring Meeting, including an increasing flow of foreign capital into the U.S. real estate markets, increasingly competitive Euro-lending business, and the pricing of real estate debt.

Monday’s Numbers: May 6, 2013Published on May 06, 2013 in Capital MarketsInsurance companies seem to be nearing lending capacity, while securitized lenders continue their comeback as more and more companies establish platforms and more and more institutional investors enjoy the relative value of “super senior” commercial mortgage-backed securities.

Monday’s Numbers: April 29, 2013Published on April 29, 2013 in Capital MarketsThe National Council of Real Estate Investment Fiduciaries released its first-quarter results for the National Property Index. Returns for the quarter ended March 31 equaled 2.57 percent, composed of appreciation equal to 1.18 percent and income equal to 1.39 percent; almost the same as the prior quarter.

Monday’s Numbers: April 22, 2013Published on April 22, 2013 in Capital MarketsIndustry forecasts are normally made in January (the beginning) or July (the mid-way point) of the year. But why not get a jump on things and forecast the balance of the year as well as 2014 from the viewpoint of the end of April? ULI senior fellow Stephen Blank shares his views on the economy, real estate industry, and the state of the capital markets.

Monday’s Numbers: April 15, 2013Published on April 15, 2013 in Capital MarketsPriced to perfection can easily turn into “priced to disappoint” as competition encourages investors to accept lower and lower yields as the price of entry. But our concern extends past the point of acquisition, as an investor can live with paying a little too much for a property by accepting a lesser initial return on investment.

Monday’s Numbers: April 8, 2013Published on April 08, 2013 in Capital MarketsThis week’s Trepp survey showed spreads unchanged. With an average spread of 164 basis points and ten-year U.S. Treasury bonds coming in 10 basis points, “all in” pricing of 3.5 percent or less for low loan-to-value loans is more than a little attractive from the borrower’s point of view and warranted from the lender’s perspective.

Monday’s Numbers: April 1, 2013Published on April 01, 2013 in Capital MarketsMaybe it was the upcoming holiday weekend. Maybe it was worries about Cyprus’s failing financial health. Maybe it was watching the S&P 500 index reach record levels. Whatever it was, this was the quietest period we’ve seen in a very long time.

Monday’s Numbers: March 25, 2013Published on March 25, 2013 in Capital MarketsA recent Wall Street Journal article expressed concerns by the Federal Reserve and other financial regulators about a potential deterioration in financial controls and underwriting quality for loans used to finance management buyouts, mergers and acquisitions, capital investment, and the like.

Monday’s Numbers: March 18, 2013Published on March 18, 2013 in Capital MarketsThere could be a new and sizable player in the commercial real estate mortgage business, as more than one sovereign wealth fund (SWF) is rumored to be investigating originating commercial real estate loans for its own book.

Monday’s Numbers: March 11, 2013Published on March 11, 2013 in Capital MarketsBoth Fitch and Moody’s Investors Service still give the U.S. their top rating, but both have placed it on a negative outlook, effectively warning that Washington will need to address the nation's long-term debt issues in 2013 or face a downgrade.

Monday’s Numbers: March 4, 2013Published on March 04, 2013 in Capital MarketsLast week surprised both analysts and investors, as it lacked the volatility in the capital markets that many had expected to occur as the sequestration enacted as part of the Budget Control Act of 2011 approached.

Monday’s Numbers: February 25, 2013Published on February 25, 2013 in Capital MarketsThe Real Estate Roundtables Q1 2013 survey showed a general improvement in respondents' perception of current and future market conditions, tempered by concerns regarding budget concerns, job creation, and the prospect of increasing interest rates.

Monday’s Numbers: February 25, 2013Published on February 25, 2013 in Capital MarketsThe Real Estate Roundtables Q1 2013 survey showed a general improvement in respondent’s perception of current and future market conditions, tempered by concerns regarding budget concerns, job creation, and the prospect of increasing interest rates.

Monday’s Numbers: February 19, 2013Published on February 19, 2013 in Capital MarketsAccording to CoreLogic, a real estate data firm, U.S. home prices in December 2012 increased 8.3 percent as compared with a year earlier, the greatest amount since May 2006.

Monday’s Numbers: February 11, 2013Published on February 11, 2013 in Capital MarketsThe institutional investor market has been scooping up all the AAA, ten-year, “super senior” CMBS bonds it can as it prowls the debt capital markets in search of yield to fund payments to beneficiaries. One driver is the continuing month-over-month improvement in CMBS delinquencies as reported by Trepp LLC and Fitch.

Monday’s Numbers: February 4, 2013Published on February 04, 2013 in Capital MarketsThe Trepp survey for the most recent period showed spreads coming in a further 10-plus basis points as securitized and conventional lenders continue their war of attrition, compressing lending spreads in response to investors continuing to drive down yields on super-senior tranches of recent CMBS offerings.

Monday’s Numbers: January 28, 2013Published on January 28, 2013 in Capital MarketsSuper-senior CMBS bonds are currently trading in the range of 72 basis points over ten-year interest rate swaps; half of what they were a year ago. According to ULI Senior Fellow Stephen Blank, spreads have narrowed to the point that securitized lenders are giving conventional, portfolio lenders a run for their money.

Monday’s Numbers: January 21, 2013Published on January 21, 2013 in Capital MarketsReal Estate Research Corporation’s fourth quarter 2012 Real Estate Investment Criteria survey showed investment conditions and capitalization rates mixed quarter-over-quarter with the markets seemingly needing time to catch its collective breath after a frenetic quarter during which equity capital flooded the markets.

Monday’s Numbers: January 13, 2013Published on January 14, 2013 in Capital MarketsAccording to the FTSE NAREIT Equity REIT Index, equity REITs produced total returns equal to 18.06 percent in 2012, including dividends equal to 3.70 percent. REITs outperformed the S&P 500 Index, the Dow Jones Industrial Average, and the NASDAQ Composite Index making 2012 the fourth year in a row that REITs have outperformed the other indices.

Monday’s Numbers: January 7, 2013Published on January 07, 2013 in Capital MarketsAgainst a background of estimates of roughly $60 billion in issuance in 2013, the commercial mortgage-backed securities market will get its first test of the year when a $1.4 billion offering comes to market this week.

Adapting to a New Realty: Inside This Year’s McCoy SymposiumPublished on December 17, 2012 in Capital MarketsULI senior fellow Stephen Blank says attendeees of last week's annual ULI/McCoy Symposium on Real Estate Finance said 2013 would be a year more to their liking and better than 2012. Participants said their companies were well positioned to benefit from shocks as well as volatility.

Monday’s Numbers: December 10, 2012Published on December 10, 2012 in Capital MarketsAccording to the most recent Trepp survey, spreads widened as much as 15 basis points, marking the end—for the moment—of the “incredible shrinking" cost of securitized mortgage debt as compared to rates quoted by commercial banks and insurance companies.
Monday’s Numbers

Monday’s Numbers: December 3, 2012Published on December 03, 2012 in Capital MarketsStandard & Poor’s Rating Services reported that CMBS delinquencies declined to their lowest level in 30 months, ending October at 9.66 percent, down from 9.77 percent in September. Importantly, the principal amount of loans liquidated, restructured, or modified so that they could return to current status exceeded the amount of delinquencies offerings.
Monday’s Numbers

Monday’s Numbers: November 26, 2012Published on November 26, 2012 in Capital MarketsAccording to its most recent Trepp survey, spreads were unchanged. It was a very quiet and short week with few, if any, deals coming to market. Rates and terms quoted by lenders appeared unchanged with the market’s focus on getting transactions papered and closed by year-end.
Monday’s Numbers

Monday’s Numbers: November 19, 2012Published on November 19, 2012 in Capital MarketsAccording to its most recent Trepp survey, spreads bounced around a little, ending the week basically unchanged week-over-week as the markets prepared for the foreshortened Thanksgiving week.

Monday’s Numbers: November 12, 2012Published on November 12, 2012 in Capital MarketsAccording to its most recent survey, Trepp reported spreads were unchanged week-over-week, likely defining pricing for the balance of the year for the most creditworthy borrowers seeking to mortgage core properties located in gateway markets.

Monday’s Numbers: November 5, 2012Published on November 05, 2012 in Capital MarketsThe equity and debt markets re-opened Wednesday, while Friday's jobs numbers were better than the majority of analysts projected, with upward adjustments to prior monthly totals. Treasury yields ended the shortened week about where they started.

Monday’s Numbers: October 29, 2012Published on October 29, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads coming in a few basis points during the survey period as lenders continue to compete aggressively for new business.

Monday’s Numbers: October 8, 2012Published on October 08, 2012 in Capital MarketsWith a number of single- borrower as well as multi-borrower deals in the queue, sales of commercial mortgage-backed securities could reach $45 billion in 2012, a 40 percent increase over the 2011 total. While that is only a fraction of the historical high-water mark in 2007, it represents significant progress in the rehabilitation process and argues for a pickup in buy-sell transaction velocity in 2013.

Monday’s Numbers: September 24, 2012Published on September 24, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads coming in a few basis points during the survey period as securitized lenders reduce spreads to borrowers, reflecting the benefit of the recent rally in the most creditworthy CMBS bonds. Institutional lenders continue to utilize floor pricing in the sub-4 percent range, reflecting a more competitive lending environment.

Monday’s Numbers: September 17, 2012Published on September 17, 2012 in Capital MarketsCommercial mortgage spreads widened a few basis points as floor pricing continues in effect with rates in the 4.0 percent to 5.0 percent range, according to the latest Trepp, LLC survey.

Monday’s Numbers: September 10, 2012Published on September 10, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads coming in five to 10 basis points during the survey period. Floor pricing continues in effect with rates in the 4.0 percent to 5.0 percent range.

Monday’s Numbers: August 20, 2012Published on August 20, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads widening about 5 basis points during the survey period as the markets head for a time out until after Labor Day. Floor pricing remains in the 4.0 percent to 5.0 percent range.

Monday’s Numbers: August 13, 2012Published on August 13, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads widening as much as four basis points during the survey period. Floor pricing in the 4 percent to 5 percent range continues in effect as the market for newly issued commercial mortgage-backed securities strengthened. Year-to-date volume equals $24.2 billion with the over-under for full year 2012 volume in the mid-$30 billion range.

Monday’s Numbers: August 6, 2012Published on August 06, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads widening six basis points during the survey period and as much as 15 basis points during the past month as capital continue to remain available from both conventional and securitized lenders for properties that can pass lenders’ stringent underwriting metrics. Floor pricing in the 4 percent to 5 percent range continues to be in effect.

Monday’s Numbers: July 30, 2012Published on July 30, 2012 in Capital MarketsThe Trepp, LLC survey showed commercial mortgage spreads basically unchanged during the past month and unlikely to change barring a systemic collapse in the capital markets, which certainly is possible in our uncertain and volatile economic and political times. In our view, a systemic problem of any magnitude will likely lead to lenders looking for someplace to hide, with liquidity prized and unavailable for borrowers except the most creditworthy ones.

Monday’s Numbers: July 23, 2012Published on July 23, 2012 in Capital MarketsThe Trepp, LLC survey showed spreads basically unchanged during the most recent survey period. Subject to an unpredictable “black swan”-like event (which is certainly possible in today’s uncertain and volatile capital markets), the balance of this year is likely to be range-bound by lenders instituting floor pricing in the 4.0 percent to 4.5 percent range.

Monday’s Numbers: July 16, 2012Published on July 16, 2012 in Capital MarketsThe Trepp, LLC survey showed spreads widening as much as nine basis points during the survey period as volatility returned to the marketplace. While wont to make predictions, we see the balance of 2012 range-bound by floor pricing (in the 4.0 percent to 4.5 percent range) by lenders.

Monday’s Numbers: July 9, 2012Published on July 09, 2012 in Capital MarketsThe Trepp, LLC survey showed spreads coming in as much as 10 basis points, an incredible amount given the turbulence affecting the credit markets, i.e., LIBORgate; Euro-crises; increased CMBS delinquencies, and widening spreads in CMBS new issues, to name just a few. Maybe it’s the heat as no one seems to be using these spreads to actually price borrower cost, relying solely on floor pricing.

Monday’s Numbers: July 2, 2012Published on July 02, 2012 in Capital MarketsThe Trepp, LLC survey showed spreads unchanged during the survey period as the markets continued to languish, waiting for…the Supreme Court, the EU and European Central bank, the Federal Reserve, the heat wave baking the majority of the country to abate…who knows. Meanwhile, lenders continue to quote loans at rates based upon floor pricing which remains very attractive.

Monday’s Numbers: June 25, 2012Published on June 25, 2012 in Capital MarketsThe Trepp LLC survey showed spreads widening 10 to 15 basis points during the survey period as the markets languish, waiting for clarity. A week ago, it was who would win the Greek election; now that the austerity party has won, the markets are holding their collective breaths waiting to see what will actually happen.

Monday’s Numbers: June 18, 2012Published on June 18, 2012 in Capital MarketsThe Trepp LLC survey showed spreads unchanged during the survey period as the market participants held their breath waiting to see how Greece fares following the critical election on June 17. Pricing remains subject to floors from both conventional and securitized lenders with all-in costs said to be 3.5 percent (+/-) for five year funds and 4.0 percent (+/-) for 10-year financing.

Monday’s Numbers: June 11, 2012Published on June 11, 2012 in Capital MarketsThe Trepp LLC survey showed spreads widening 10 to 15 basis point solely in reaction to Treasury yields dropping, then regaining a little luster. With the 10-year Treasury trading at 1.64 percent (as of June 9) and spreads averaging 228 basis points, all-in cost remains in the very attractive 4.00 percent range, subject to floor pricing by most lenders.

Monday’s Numbers: June 4, 2012Published on June 04, 2012 in Capital MarketsThe Trepp LLC weekly and Cushman & Wakefield Sonnenblick-Goldman monthly surveys show that spreads have widened by 20+ basis points over the past month, partially to accommodate perceived increases in risk and partially to absorb the incredible decline in Treasury yields.

Monday’s Numbers: May 28, 2012Published on May 28, 2012 in Capital MarketsThe Trepp LLC survey showed spreads narrowing 3+/- basis points during a quiet week leading up to a three-day weekend. Average spreads of 215 basis points combined with “sub-2” percent 10-year U.S. Treasury bonds remains attractive to say the least.

Monday’s Numbers: May 21, 2012Published on May 21, 2012 in Capital MarketsThe Trepp LLC survey showed spreads unchanged during the most recent survey period as the markets spent the week either waiting on the Facebook initial public offering or the imminent default on its obligations by some or all of the southern portion of Europe.

Monday’s Numbers: May 14, 2012Published on May 14, 2012 in Capital MarketsThe Trepp LLC survey showed spreads widening as much as 15 basis points for no apparent reason we know of except, possibly, the continuing crises in Europe and concerns that the U.S. will catch their flu. Fortunately, money is plentiful with a majority of the widening of spreads offset by the lower yields on 10-year Treasury bonds.

Monday’s Numbers: May 7, 2012Published on May 07, 2012 in Capital MarketsAccording to the FTSE NAREIT Equity REIT Index, equity REITs produced total returns equal to 2.87 percent in April. The Trepp LLC survey showed spreads flat to widening by 5 basis points over the survey period as all-in costs remain attractive.

Monday’s Numbers: April 30, 2012Published on April 30, 2012 in Capital MarketsThe Trepp LLC survey showed spreads widening over the past two weeks in response to the yield on 10-year Treasury bonds which narrowed by about 15 basis points. Lending spreads continue to move in a narrow range with overall cost attractive at all maturities and from a wide array of capital sources.

Monday’s Numbers: April 23, 2012Published on April 23, 2012 in Capital MarketsAccording to the most recent survey by Real Estate Research Corporation, average capitalization rates continued to decline as more and more capital is invested in real estate. Lending spreads continue to move in a narrow range with overall cost attractive at all maturities and from a wide array of capital sources.

Monday’s Numbers: April 16, 2012Published on April 16, 2012 in Capital MarketsOver the past month, the Cushman & Wakefield Sonnenblick-Goldman Survey narrowed, with 10-year rates improving as much as 40 basis points for some property sectors.

Monday’s Numbers: April 2, 2012Published on April 02, 2012 in Capital MarketsSpreads reported by Trepp LLC continued to narrow, coming in approximately 10 basis points during the survey period; mortgage capital remains both available and affordable, even with many lender’s instituting floor pricing.

Monday’s Numbers: March 26, 2012Published on March 26, 2012 in Capital MarketsSpreads reported by Trepp LLC came in approximately 10 basis points during the survey period with financing available from an array of lenders including commercial banks, securitized lenders, and insurance companies.

Monday’s Numbers: March 19, 2012Published on March 19, 2012 in Capital MarketsSpreads reported by Trepp LLC came in approximately five basis points during the survey period with financing available from an array of lenders including commercial banks, securitized lenders, and insurance companies.

Monday’s Numbers: March 12, 2012Published on March 12, 2012 in Capital MarketsSpreads reported by Trepp LLC remain “range-bound” at an average spread of 207 basis points over 10-year Treasuries. The Cushman & Wakefield Sonnenblick-Goldman Survey shows rates coming in slightly with lenders seemingly ready to lend at attractive spreads if the right deal comes their way.

Monday’s Numbers: February 20, 2012Published on February 20, 2012 in Capital MarketsThe past week was very quiet; volatile as usual, but very quiet. There was little to report: some deals funded; some properties were turned over to their special services; some deals went under contract; some fell out of contract; and some closed.

Monday’s Numbers: February 13, 2012Published on February 13, 2012 in Capital MarketsWhile Prudential sees a 20 percent increase in commercial mortgage lending this year, this is not going to exactly move the needle for the average borrower as insurance companies by and large focus their general account’s attention on core properties, gateway cities, and “pristine” borrowers.

Monday’s Numbers: January 30, 2012Published on January 30, 2012 in Capital MarketsBased on the Federal Reserve’s pronouncement this week that it would be keeping short-term interest rates at the current historical low through 2014, we should expect rates to remain at today’s levels for the next three years, baring a global financial crises, Stephen Blank, ULI's senior resident fellow, capital markets.

Monday’s Numbers: December 26, 2011Published on December 26, 2011 in Market TrendsAccording to an analysis completed by Trepp LLC, “U.S. banks are going to face increased challenges in 2012, with slow earnings growth, a mild improvement in loan performance and continued bank failures.” Banks, it was noted, are continuing to face a tough regulatory environment, compounded by fewer and fewer opportunities for future earnings growth.

Monday’s Numbers: December 19, 2011Published on December 19, 2011 in Market TrendsAccording to Jones Lang LaSalle’s 2012 National Commercial Real Estate Outlook, the U.S. commercial real estate market will see slow growth in 2012 with a projected increase in transaction volume of 15 percent to 20 percent. Distribution and ports are expected to lead the recovery in the industrial sector while growth in the hotel sector, though slow, is expected to be driven by buy-side demand from private equity funds.

Monday’s Numbers: December 12, 2011Published on December 12, 2011 in Market TrendsTrepp LLC survey showed spreads narrowing a few basis points across all property types in what was a lackluster week in the debt markets. The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ending December 1, 2011, showed spreads for 10-year mortgages unchanged.

Monday’s Numbers: December 5, 2011Published on December 05, 2011 in Market TrendsThe Trepp LLC survey showed spreads widening approximately 10 basis points across all property types in direct reaction to the continuing Euro-crises. While everyone wants to believe everything is under control, it appears few actually believe it to be so.

Monday’s Numbers: November 28, 2011Published on November 28, 2011 in Market TrendsHighlights of the October 2011 Federal Reserve Senior Loan Office Opinion Survey include, amongst other findings: fewer domestic commercial banks eased lending standards, one-fourth of foreign bank respondents tightened lending standards, and less easing of credit standards in the third quarter of 2011 as compared to past surveys.

Monday’s Numbers: November 21, 2011Published on November 21, 2011 in Market TrendsThe Trepp LLC survey showed spreads narrowing a few basis points during the most recent survey period, evidence that the debt market remains open and raring to go. Like peanuts at the circus: get’em while their hot; can it get better than this?

Monday’s Numbers: November 14, 2011Published on November 14, 2011 in Market TrendsThe Trepp LLC survey showed spreads widening 15+/- basis points during the most recent survey period, evidence that the debt market remains cautious and easily spooked by current events. Nevertheless, all-numbers are more than a little attractive.

Monday’s Numbers: November 7, 2011Published on November 07, 2011 in Market TrendsThe Trepp LLC survey showed spreads coming in as much as 25 basis during the most recent survey period, evidence that the market, so far, is able to function with the Euro-crises playing out in the background.

Monday’s Numbers: October 31, 2011Published on October 31, 2011 in Market TrendsThe Trepp LLC survey showed spreads coming in as much as 25 basis during the most recent survey period, evidence that the market, so far, is able to function with the Euro-crises playing out in the background.

Monday’s Numbers: October 24, 2011Published on October 17, 2011 in Market TrendsThe Trepp LLC survey showed spreads coming in as much as 15 basis during the most recent survey period, evidence that the market, so far, is able to function with the Euro-crises playing out in the background.

Monday’s Numbers: October 17, 2011Published on October 17, 2011 in Market TrendsThe Trepp LLC survey narrowed a bit during the most recent survey period. Deals appear to be closing on time, on schedule, and at quoted rates. Our sources say commercial real estate mortgages are being quoted in the low 5’s to high 6’s range at maximum loan-to-value ratios of 65 percent.

Monday’s Numbers: October 10, 2011Published on October 10, 2011 in Market TrendsThe Trepp LLC survey showed spreads stabilizing to even narrowing a bit during the most recent survey period. Deals appear to be happening as everyone looks over their shoulder waiting for the next shoe to fall somewhere in the global capital markets. So…hurry up and get your deals done while rates are as low.

Monday’s Numbers: October 3, 2011Published on October 03, 2011 in Market TrendsThe Trepp LLC survey showed spreads widening dramatically during the survey period (an average of 15+/- basis points) as concern about non-real estate factors such as the Federal Reserve’s activities, the Euro-financial market crises, and the a perceived increase in Sovereign risk, to name a few, weighed on lenders minds and lending strategies.

Monday’s Numbers: September 26, 2011Published on September 26, 2011 in Market TrendsThe Trepp LLC survey showed spreads continuing at current levels as everyone appears focused on an array of non-real estate factors and events such as the Federal Reserve doing the “Twist”, Euro-financial market confusion, and Sovereign risk, to name a few. Deals are continuing to get done at slightly wider spreads.

Monday’s Numbers: September 19, 2011Published on September 19, 2011 in Market TrendsAccording to an analysis by REIT Cafe, multifamily REITs have “thrived,” helped by Echo Boomers among the various age cohorts. The Trepp LLC survey showed spreads continuing at current levels, reflecting a “wait and see” attitude. Deals are getting done at slightly wider spreads as market participants wait out the impact of the Euro-credit crises on U.S. capital markets.

Monday’s Numbers: September 12, 2011Published on September 12, 2011 in Market TrendsAccording to Trepp LLC, seven banks failed in August as compared to 13 in July; total failures in 2011 have reached 68, putting the U.S. on track to record 100+/- failures this year.

Monday’s Numbers: September 5, 2011Published on September 06, 2011 in Market TrendsIf you want to understand why rates quoted by conduits have increased during the past few months, look no further than the trading spreads being quoted on the securities created by the pooling of commercial and multifamily mortgage loans of cash flows from the underlying mortgages.

Monday’s Numbers: August 29, 2011Published on August 29, 2011 in Market TrendsDue to earthquakes, hurricanes, and vacation schedules, the Trepp LLC survey will not be updated until after Labor Day. An informal survey we conducted this week showed most borrowers and lenders waiting for things to “just settle down.” We understand some insurance companies are considering instituting “Floor Pricing” but we’ve seen no official policy statements so far.

Monday’s Numbers: August 22, 2011Published on August 22, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders showed spreads widening 15+/- basis points week-over-week, putting them 35 to 50 basis points wider than at the beginning of the month. Everyone seems to be in a holding pattern, afraid to pull the trigger so to speak and get caught on the wrong side of a transaction having a 5 year or longer maturity. Our recommendation: wait out the days till Labor Day at the beach!

Monday’s Numbers: August 15, 2011Published on August 15, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders showed spreads widening an average of 20, repeat 20, basis points during the survey period as financing circles the field, waiting for word from the tower that it’s safe to land and for the markets to decide if it’s 1998 or 2007 again.

Monday’s Numbers: August 8, 2011Published on August 08, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders showed spreads widening an average of 5 basis points during the survey period with financing remains available in the 5 percent +/- range.

Monday’s Numbers: August 1, 2011Published on August 01, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders showed spreads coming in at an average of 5 basis points during the survey period. Financing remains available in the 5 percent +/- range.

Ackman-Ziff Joint Venture Equity Market SurveyPublished on July 26, 2011 in Capital MarketsThe Ackman-Ziff Real Estate Group LLC has graciously provided us with access to its most recent quarterly surveys of terms and conditions in the private equity and debt commercial and multifamily real estate capital markets; the equity survey follows.

Monday’s Numbers: July 25, 2011Published on July 25, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged during the most recent survey period with financing remaining available in the 5 percent +/- range.

Monday’s Numbers: July 18, 2011Published on July 18, 2011 in Market TrendsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged during the most recent survey period with financing available in the 5 percent +/- range. The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended July 7 showed fixed and floating rate spreads remaining unchanged in most property sectors during the survey period with financing remaining available at attractive and affordable rates.

Monday’s Numbers: July 11, 2011Published on July 11, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders came in five to six basis points during the survey period, most likely in response to 10-year Treasury bonds widening approximately 30 basis points during the period.

Monday’s Numbers: July 4, 2011Published on July 05, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened a bit. Range bound around the 5.00 percent level is not a bad place to be.

Monday’s Numbers: June 27, 2011Published on June 27, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained relatively unchanged during the most recent survey period. And as we seem to say, all-in costs remain in the 5.00+/- percent range and should be range bound for the foreseeable future, subject to a “Black Swan” event.

REITs Continue to RollPublished on June 21, 2011 in Market TrendsWhile May was sort of a neutral month for real estate investment trusts, REITs year-to-date have shown total returns of 14.13 percent, including dividends—and the industry’s prospects look promising.

Monday’s Numbers: June 20, 2011Published on June 20, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained relatively unchanged during the most recent survey period. And as we seem to say, all-in costs remain in the 5.00+/- percent range and should be range bound for the foreseeable future, subject to a “Black Swan” event.

Monday’s Numbers: June 13, 2011Published on June 13, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders “took a licking” as spreads widened in many sectors of the debt capital markets. Regardless, all-in costs remain in the 5.00+/- percent range and should be range bound for the foreseeable future, subject to a “Black Swan” event (which is not too hard to imagine if one just looks at the newspaper each morning).

Monday’s Numbers: June 6, 2011Published on June 06, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained static, with all-in costs remaining in the 5.00+/- percent range. Our sense is that rates will be “range bound” for the foreseeable future, subject to a “Black Swan” event, like the U.S. Government defaulting on its sovereign debt.

What I Learned at the 2011 ULI Real Estate Summit Industry RoundtablesPublished on May 23, 2011 in Spring MeetingOne key takeaway from the 2011 ULI Real Estate Summit Industry Roundtables is that there is now a line to get money invested in income-producing real estate, says ULI’s senior fellow of finance, Stephen Blank. Read Blank's litany of takeaways from ULI's Spring Council Forum sessions, “Real Estate Capital and Policy Trends” and “Sourcing Debt and Equity.”

Monday’s Numbers: May 23, 2011Published on May 23, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders came in a little during the week with all-in costs remaining in the 5.00+/- percent range.

Federal Reserve Senior Loan Officer Opinion SurveyPublished on May 10, 2011 in Capital MarketsThe April/May Federal Reserve senior loan officer opinion survey notes that both credit standards and loan terms to commercial and industrial (C & I) borrowers continued to ease with the percentage of domestic banks tightening C & I lending standards continuing to moderate (with fewer banks reporting tightening standards). Are commercial banks showing an increasing willingness to extend credit to both small and large business and household borrowers?

CMBS Delinquency Rate Inches UpPublished on May 10, 2011 in Capital MarketsAccording to Trepp LLC, the U.S. commercial mortgage-backed securities (CMBS) delinquency rate (comprised of the percentage of loans 30+ days delinquent, in foreclosure, or held on the books of the lender as real estate owned (REO)) increased 23 basis points (0.23 percent) in April to 9.65 percent, the highest rate in history and the largest increase on a monthly basis since December 2010. See the break out by property sector and read the key takeaways.

Banks Continue De-leveraging as Holdings of Commercial Real Estate Loans Declined 7.5 Percent in 2010Published on May 10, 2011 in Capital MarketsWhatever the principal reason, the nation’s largest banks reduced their holdings of commercial real estate loans in 2010 by approximately $75 billion (7.5 percent) to roughly $929 billion. Not surprisingly, the entire decline was associated with changes in one loan segment: land and construction loans. Total mortgages on income-producing commercial and multifamily property, however, remained relatively static at about $609 billion and $134 billion, respectively.

Monday’s Numbers: May 9, 2011Published on May 09, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained literally “frozen in place” over the past few weeks. All-in cost remains in 5.00 to 5.25 percent range. The Cushman & Wakefield Sonnenblick-Goldman survey for the period ended April 28 showed spreads narrowing 10 to as much as 25 basis points; it’s hard to imagine mortgages being priced more attractively.

Just When We Thought It Was Safe to Go to the BankPublished on May 06, 2011 in Market TrendsApril 15, 2011, was a “Black Friday” of sorts, with federal bank regulators closing six banks, representing a serious increase in such activity. Commercial real estate loans accounted for $304 million of the banks’ combined distressed portfolio, or about 76 percent of total footings. Read what analysis of the numbers says about the continuation of real estate loans going bad and banks failing.

Monday’s Numbers: April 25, 2011Published on April 25, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened slightly as a result of a widening in spreads for 10-year U.S. Treasury bonds. Average rates closed the reporting period at 5.24%. Due to the Good Friday holiday closing of the financial markets the weekly Trepp survey was not updated this week.

Monday’s Numbers: April 18, 2011Published on April 18, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened slightly as a result of a widening in spreads for 10-year U.S. Treasury bonds. Average rates closed the reporting period at 5.24%. The Cushman & Wakefield Sonnenblick-Goldman survey ended March literally where it started with spreads in the 250 basis point range (for 5-year loans) and 185 basis point range (for 10-year loans).

Monday’s Numbers: April 11, 2011Published on April 11, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders narrowed over the reporting period with average rates now closer to 5.0%. The Cushman & Wakefield Sonnenblick-Goldman survey ended March literally where it started with spreads in the 250 basis point range (for 5-year loans) and 185 basis point range (for 10-year loans).

The Regulatory “Corn Maze” Continues to GrowPublished on March 24, 2011 in Capital MarketsIt appears that the Federal regulators (comprised of the Securities Exchange Commission, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency) will shortly announce the long awaited proposed regulations requiring lenders to retain an economic interest in loans they securitize. Read ULI’s senior resident fellow, Stephen R. Blank’s, view of what we might see.

Monday’s Numbers: March 21, 2011Published on March 21, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders continued to narrow week-over-week with financing available at attractive rates (5.25%+/-). The Cushman & Wakefield Sonnenblick-Goldman Survey came in slightly over the past two weeks—we expect rates to remain at these levels barring a “shock” to the system for the foreseeable future.

And You Thought We Were Done With Regulation!Published on March 17, 2011 in Capital MarketsThe Basel Committee on Banking Supervision has announced criteria for defining a Systematically Important Financial Institution, a bank “too big to fail.” Read what they listed as the five criteria they believe will help identify financial institutions whose failure would threaten both the global economy and financial system, and would be cause for heightened financial operating constraints.

Commercial Mortgage-Backed Securities: UP, UP, and Away!Published on March 09, 2011 in Capital MarketsAccording to a recent report from Fitch, the percentage of commercial mortgage-backed securities loan balances that are delinquent at least 60 days or in foreclosure reached 8.76 percent, an increase of 17 basis points (0.17 percent) since January’s rate and 247 basis points (2.47 percent) over a year earlier. Fitch’s database includes approximately 37,000 loans totaling $416.9 billion. See details of the CMBS delinquencies by property sector.

Are Private Equity Real Estate Funds Back?Published on March 03, 2011 in Market TrendsFund raising activities in prior years were dampened by a combination of factors including performance of legacy properties, funds taking everything from huge write-downs and write-offs to mailing back the keys to the lender, vintage capital standing on the sidelines waiting to be invested, and investor caution. Read about what changed in 2010.

Federal Reserve Senior Loan Officer Opinion SurveyPublished on March 03, 2011 in Market TrendsRead the encouraging news in the Federal Reserve’s most recent Senior Loan Officers Opinion Survey, which reflects positive changes in the relaxing of their standards for commercial and industrial loans to large borrowers. Also read what is happening with respect to small borrowers, demand for commercial real estate financing, and lending standards for real estate loans.

Federal Reserve Beige Book Economic Survey – March 2, 2011Published on March 03, 2011 in Market TrendsYesterday afternoon, the Federal Reserve released its Beige Book economic survey of conditions in the 12 Federal Reserve Districts. The survey covered the period from January 1st through early February, 2011. Read this brief summary of the results of the survey of economic activity from the districts around the country.

The Times, They Are…ImprovingPublished on March 02, 2011 in Market TrendsThe times, they are improving. So says the National Property Index of the National Council of Real Estate Investment Fiduciaries which produced stellar returns during the 4th quarter 2010 as well as on a trailing 12-month basis. See how their index, comprised of 6,175 properties valued at $247.1 billion, charts the performance of properties and functions as a benchmark for many institutions.

Monday’s Numbers: February 28, 2011Published on February 28, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged; financing appears available at attractive rates (5.25% - 5.50%). Absent a severe “shock to the system”, rates seem likely to fluctuate within this narrow band for the foreseeable future.

Commercial Mortgage-Backed Securities ReportPublished on February 09, 2011 in Capital MarketsAccording to Fitch, the 60-day delinquency rate on cmbs offerings reached 8.59% as of January 31, 2011, as compared to 8.23% a month earlier, and 6.00% as of a year earlier. Fitch tracks the performance of approximately 38,000 loans valued at approximately $416 billion. Read where Steve Blank advises putting your “rescue money” if it is looking for a “home.”

Monday’s Numbers: February 7, 2011Published on February 07, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged as a decrease in spreads was offset by an increase in 10-year Treasury bonds. An all-in cost of 5.25% - 5.30% remains very attractive.

Monday’s Numbers: January 31, 2011Published on January 31, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged; both sides of the market (borrowers and lenders) seem content for now with spreads and rates where they are.

Monday’s Numbers: January 24, 2010Published on January 24, 2011 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged. Wait another two weeks and we’ll see how things shape up after the first round of 2011 deals are committed. Read about snapshot deals reflecting today's capital markets.

Top 10 Trends from REIT CaféPublished on January 20, 2011 in Capital MarketsEach quarter, REIT Cafe's editor notes top trends and themes in the real estate investment trust space. Read a summary of the editor’s strategic trends and company picks for the first quarter of 2011.

Federal Reserve Board Beige Book Economic SurveyPublished on January 20, 2011 in Market TrendsAll 12 Federal Reserve Districts reported some level of improvement in economic activity during the most recent survey period (mid-November to Mid-January) as well as for 2011, including improved hiring plans. Read a summary of select highlights from the survey.

Monday’s Numbers: January 17, 2010Published on January 17, 2011 in Capital MarketsWhile transaction volume is still “meager” when compared to the heady days of 2007, it represents an inflection point; whether it will be defined as the “beginning of the end” or the “end of the beginning” is immaterial. Read about what is material and review this week's numbers round-up.

Notes from the January 9, 2011 issue of “The Punch Line…”, published by Abraham GulkowitzPublished on January 12, 2011 in Market TrendsDespite growing evidence of acceleration in the recovery, the latest employment reports offered some sobering reality checks. The ranks of the long-term unemployed rose by 113,000 in December. True, the U.S. economic recovery has thrown off several other strong signals of recovery. But the expanding layer of near-permanently jobless people or clearly underemployed remains bad news for long-term fiscal and social health. Read a round-up of recent economy and market information.

Monday’s Numbers: January 10, 2011Published on January 10, 2011 in Capital Markets2010 ended on a strong note with all-in 10-year mortgage spreads in 5.25%+/- range which should have proved attractive to all but the most jaded investors. But as they say, it’s still “early days” and few lenders have announced plans and targets for 2011.

2011 Trends Report Points to Era of LessPublished on December 21, 2010 in Market TrendsAfter three difficult years of dislocations and losses during which property values were reported to have declined by as much as 40 percent, some relief is coming. So say participants in surveys for Emerging Trends in Real Estate® 2011. Learn which five markets were identified by participants as the ones to watch in terms of commercial and multifamily investment.

ULI Real Estate Capital Markets Forum, LondonPublished on December 21, 2010 in Capital MarketsULI holds a series of invitation-only, real estate capital markets forums each year. The 2010 forums, held in Singapore, Tokyo, London, and New York, convene a wide array of industry participants. Read what the participants predicted and concluded on the 2011 and beyond public equity capital markets, the situation in Germany, debt regulation, the situation in Ireland, banks and lending, and trends.

Monday’s Numbers: December 20, 2010Published on December 20, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened slightly during the most recent survey period. It’s year-end, and lender’s are starting to focus on next year’s allocations. If it’s a typical start, rates will be up slightly as lenders test the waters as to what spreads will work and what borrowers" will accept. We’ll see if the current glass ceiling of 5.0 percent holds or if it’s off to the races in 2011.

Monday’s Numbers: December 13, 2010Published on December 13, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders came in slightly during the most recent survey period. During the period, 10-year Treasury bond yields were unchanged. There seems to be an all-in cost of 5.0% “glass ceiling” in place. For the survey period, average all-in cost equaled 5.02%, the “present” glass ceiling. Not much is expected to happen during the next two weeks so we’ll sit on the sidelines and wait for January’s allocation to re-fill lender’s coffers.

Monday’s Numbers: December 6, 2010Published on December 06, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders was unchanged. There seems to be an all-in cost of 5.0% “glass ceiling” in place. For the survey period, average all-in cost equaled 4.80 percent.

Factoid: Learn a Foreign Language – FedSpeakPublished on December 06, 2010 in Capital MarketsNew, from the people who brought you TARP (Troubled Asset Relief Program), TALF, P-PIP, et al, a whole new set of acronyms to replace a whole old set of acronyms. Courtesy of Bloomberg Businessweek (October 18 – October 24, 2010, including a road map of what they were intended for as well as what the new agencies are supposed to do.

Monday’s Numbers: November 22, 2010Published on November 22, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders narrowed slightly in response to widening in the yield of 10-year Treasury bonds. There seems to be an all-in cost of 5.0% “glass ceiling” in place as loan spreads moved in and Treasury spreads widened to accommodate changes in spreads and/or yields. For the survey period, average all-in cost equaled 4.87 percent.

Monday’s Numbers: November 15, 2010Published on November 15, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders narrowed significantly (17 basis points on average) with multifamily spreads breaking the 200 basis point barrier between sanity and complete madness. Less than 200 over the 10-year curve seems a little too low a spread to compensate for the risks associated with making a loan secured by an operating business. During the period, 10-year Treasury bond yields were flat, with average all-in cost equal to 4.66 percent.

Notes from the October 20, 2010 issue of “The Punch Line…”, published by Abraham GulkowitzPublished on November 09, 2010 in Market TrendsAmid continued disappointments on the job recovery’s progress, momentum has been building toward a Q4 Fed easing. While many commodity prices have been running away as if global recovery were robust, and the bid for risk assets overall quite intense, there is little evidence on the ground of a recovery except for the announcement that the recession was officially over. Read more snapshots of the markets.

Monday’s Numbers: November 8, 2010Published on November 08, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders was mixed with some widening and some narrowing between October 22nd and October 29th. During the period, 10-year Treasury bond yields came in 5 basis points, with average all-in cost equal to 4.83 percent.

Monday’s Numbers: November 1, 2010Published on November 01, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders was mixed with some widening and some narrowing between October 15th and October 22nd. During the period, 10-year Treasury bond yields widened 5 basis points, with average all-in cost equal to equal to 4.89 percent.

Monday’s Numbers: October 25, 2010Published on October 25, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened between October 8th and October 15th. During the period, 10-year Treasury bond yields remained flat, with average all-in cost equal to equal to 4.86 percent.

Federal Reserve: Wait and See StrategyPublished on September 22, 2010 in Capital MarketsThe Federal Open Market Committee, concerned about continued weakness in the pace of economic recovery, noted at the end of its meeting today that it “will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”

Basel III Rules: A Regulatory Guideline for Monitoring the Financial Health of BanksPublished on September 22, 2010 in Capital MarketsThe core of the Basel III regulations is the requirement that banks maintain equity (or “Tier I Capital”) equal to 6.0 percent of total assets, an increase of 4.0 percent over current requirements. Banks must also maintain a capital conservation buffer equal to 2.5 percent, thereby providing an overall equity requirement of 8.5% of total assets. How are the U.S. banks poised for the change?

FACTOID: Where Are Housing Property Prices Still Holding Up?Published on September 22, 2010 in Market TrendsAccording to an analysis in Bloomberg Businessweek (July 26 – August 1, 2010), home prices in Asian cities, together with some Scandinavian countries, significantly increased during the first quarter 2010 as compared to the same period in 2009. How did housing prices in Europe and the United States compare?

Monday’s Numbers: September 20, 2010Published on September 20, 2010 in Capital MarketsThe Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points (0.05 percent) between September 3 and September 10. During the period, 10-year Treasury bond yields increased 4 basis points, with average all-in cost equal to equal to 4.95 percent.

Commercial Mortgage-Backed Securities Delinquencies Reach 8.48 PercentPublished on September 13, 2010 in Capital MarketsFitch Ratings prediction from earlier in the year that commercial mortgage-backed securities (CMBS) delinquencies would reach 12 percent by year-end is unfortunately looking “spot on” as delinquencies reached 8.48 percent as of August 31, 2010, an increase of 23 basis points (0.23%) as compared to July 31, 2010.

Capital Markets Update: EconomyPublished on September 02, 2010 in Capital MarketsMuch of the economic data has been coming in weaker than many experts had expected, even as companies appear to have made an impressive recovery from the Great Recession. Talk of a double-dip downturn is spreading. Bottom line--the economy that emerges from this recession may not resemble the pre-recession economic fabric. What will the economy that emerges from this recession look like?

REITs Rule…at Least for NowPublished on September 02, 2010 in Capital MarketsWhy are REITs so seemingly attractive? Among the reasons, in no particular order, is the principal of anticipation; investors know that real estate is not overbuilt – it’s just “under-demanded, which will be self-correcting as the economy improves. Investors, anticipating a recovery in industry fundamentals want to be owners of shares rather than spectators trying to time the bottom of the market.